Monday, August 21, 2006

The New World Disorder: $491 million NAFTA rail deal

A $491 million public-financing deal promoted by Florida Gov. Jeb Bush as a boon to commuters actually paves the way for shipping more cheap goods from China to the North American marketplace, charges a whistleblower.

Ex-CSX Transportation employee Dave Nelson told WND the deal in Florida amounts to providing CSXT with a public subsidy. Money from the public purse will position the railroad company as a major freight carrier throughout Florida, transporting cargo containers filled with cheap goods coming into the NAFTA marketplace from China.

CSXT is positioned to receive millions in the deal. Under the terms of the agreement, the state of Florida will invest $318 "in partnership with CSXT" to improve the infrastructure and expand capacity on existing train tracks. According to CSXT, the breakdown of how the Florida subsidy will be spent is specified as follows:

$198 million for projects on the CSXT rail line between Baldwin to Plant City, referred to as the "S" line;

$ 59 million to build five road overpasses in Alachua, Sumter and Marion counties on this line;

$ 52 million on other CSXT rail lines around the state; and

$ 9 million to build access roads to the new Integrated Logistics Center in Winter Haven – the mother of all rail yards – which will be built by CSXT

Commuter lines, when opened, will only operate five trips at peak morning and afternoon rush hours, with the commuter trains running again only at two-hour frequency in non-peak hours. At other times, CSXT will use the commuter rail lines for transporting freight.

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Dave Nelson told WND the Florida subsidy for CSXT reflects a nationwide trend. In 2005, the Bush administration passed through Congress a $286.4 billion transportation bill, the Safe, Accountable, Flexible, Efficient Transportation Equity Act – A Legacy for Users. The purpose of the legislation was supposedly to provide funding for federal highways and transit programs.

But Nelson told WND the bill was being used to provide a public subsidy for upgrading freight railroads such as CSXT on taxpayer dollars.

"This CSXT deal in Florida reflects a national strategy that falls in line with President Bush’s $286 billion transportation spending package for highways and railroads," he said. "What the federal government plans to do is to buy up unused and aging rail lines all across the country and to use taxpayer dollars to pay for upgrading the infrastructure. What is left unsaid is that the railroad freight companies CSX will get priority over mass transit for the use of the new rail lines."

Nelson also told WND that CSXT plans to over-charge the government for upgrading and maintaining rail lines.

"CSX will do the maintenance on the rail lines, but state and federal funds will fund the maintenance for CSX," he said. "As I have already proven to the U.S. Department of Transportation, companies like CSX in particular use a form of cost-shifting which permits CSX to take the cost of labor and materials and 'cost-shift' CSX responsibilities over to maintenance, which then will be paid by federal and state tax dollars. Instead of keeping this as a separate entity to improve transportation between two points, the Bush administrations nationally and in Florida are shoving this down the people's throat."

Nelson noted that Florida had already voted down the state proposal to build a "Bullet Train” for rapid rail mass transit "because the state couldn’t prove the economics of the deal or how many riders the Bullet Train would actually have."

The economic benefit to CSXT is clear, Nelson told WND: "CSXT sells abandoned or obsolete rails to the state government at an astronomical price. Then CSXT gets tax dollars to pay for modernizing the railroad infrastructure and maintaining it afterwards. The result is that CSXT gets priority over the new rail lines, pushing mass transit to a second, very distant position. Cost-shifting is a great deal for CSXT, but a lousy deal for the taxpayers."

In 1993, Nelson's allegations that CSXT was over-charging for improvements made to railroad crossings resulted a Federal DOT investigation in conjunction with the Florida Attorney General's Office. To resolve the RICO charges, CSXT made a "voluntary refund" of $2.1 million to 18 states in restitution for overcharges. In 1994, Nelson filed a False Claims Action against CSXT that was settled in 1995 when CSXT offered the U.S. Department of Justice a $5.9 million payment for the overcharges.

In 2005, New York Times reporter Walt Bogdanich won a Pulitzer Prize for series of articles entitled "Death on the Tracks," investigating railroad company cover-ups regarding faulty equipment, overcharges and fatal accidents at railroad crossing accidents. Bogdanich's investigation was prompted and advanced by inside information Dave Nelson supplied.

Nelson maintains that a primary purpose of SAFETEA-LU Act is to provide a NAFTA infrastructure for moving cheap goods from China into the interior of the U.S. Currently, Dave Nelson, is on leave for a back injury from a stockroom job at Lowes in Florida, working the midnight shift stacking shelves for $9.48 an hour.

Nelson said he connected the dots between his railroad experience and what he perceives is the government plan to build NAFTA railroad corridors.

"If you go to Lowes you will now see that 75 to 80 percent of all the inventory on the shelves comes from China," he said. "First you have to produce these goods at low cost and China has the lowest possible labor cost using child labor, slave labor, or labor at practically no cost that American workers can’t possibly compete with. So, our government has allowed a huge number of manufacturing jobs to go to China, but then you need to move these goods back to the end-user in the U.S. Then you get into logistics. This involves maritime, trucks, and rails. The goal is to improve the railroad infrastructure to increase the speed freight trains can move through the U.S. The government doesn’t want to tell the U.S. taxpayer that $284 billion in tax dollars are going to be moved into private railroad. So, the government instead argues that the goal is to improve the infrastructure by developing mass transit, just like you see going on in Florida right now."

In return for his role in the 1994 False Claims settlement with CSXT, Nelson received a $1.18 million payment.

WND called John Long, a special investigative agent with the U.S. DOT in Washington. Long abruptly ended a phone call concerning Nelson's allegations by stating: "We wouldn't have any comment. We’ve investigated Mr. Nelson’s allegations and the case is closed."

Still, Long's comment to WND served to verify that an investigation of Nelson’s charges did exist, even if the investigation was now terminated.

Even today, Nelson's allegations remain emotionally charged. His allegations concerning CSXT overcharges involve the management of CSXT while John Snow, former U.S. secretary of treasury, was still the CEO of CSXT. Nelson maintained to WND that John Snow was nominated and sworn-in as secretary of the treasury "while he was still under investigation for the allegations I have been making ever since 1993 of what I believe are CSXT overcharges and fraud continuing even today."